"We're very important," Blankfein is quoted as saying in The Times of London. "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It's a virtuous cycle."

He goes on to admit to being the focus of public outrage--"I know I could slit my wrists and people would cheer"--but then blows the attempt to reconciliation by saying he is "doing God's work."

Blankfein, whose firm posted $3 billion in third quarter earnings and plans to hand out over $16 billion in year end bonuses, tries to defend the firm's compensation by saying that they are linked with long-term performance and don't create systemic risk.

What Blankfein seems to miss is that much of the public's anger over the bonuses is based on a perceived injustice: without government aid at the end of 2008, Goldman would likely have been destroyed in the ensuing financial crisis. The public correctly understands that despite this socialization of risk, much of the profit of Goldman Sachs is also due to goverment aid in the form of access to cheap money.

There's really not much Goldman can do about this situation. Paying the money to shareholders would only reward the shareholders for demanding the firm take on additional risk. There's really no good solution to the moral and economic problems of an investment bank propped up by an implicit government guarantee. And anyone acquainted with market processes shouldn't be surprised by this: intervention distorts markets, creating insoluable moral and economic problems.

And, as we expect Blankfein will soon discover, no amount of smiling for the Sunday paper's is going to make the public accept those problems without ill-will to the beneficiaries.